In February 2003, the MCIA closed its first bond transaction: a $16.89 million pooled bond sale. This refunded the pension liabilities of the county government, four municipalities and three school boards in the county. By using the MCIA, the participants collectively saved more than $8.6 million (cash basis) on their pension liabilities.
It costs money to issue bonds. For entities that needed to borrow only a small amount, pooling provided an opportunity to spread the cost of bond issuance among all borrowers. Without pooling, several entities could not refinance their pension liabilities. The fixed costs were too high and there isn't much demand for small taxable municipal offerings.
Since this was a taxable financing, the larger dollar amount was more attractive to potential investors. The market penalty associated with smaller taxable bond offerings was eliminated.
The following is a listing of the participants and their cash savings:
County of Morris, $3,247,904
Roxbury Board of Education, $2, 071,151
Roxbury Township, $1,842,049
Mt. Olive Board of Education, $662,999
Morris Township, $509,816
Mt. Olive Township, $233,526
Morris Plains Borough, $39,853
Chester Board of Education, $20,834
Top of Page